The Wesfarmers Ltd (ASX: WES) share price has been on quite a pleasing run of late. In 2023 so far, Wesfarmers shares have risen by a healthy 7.4%. Over the past 12 months, the gains have been more muted, with Wesfarmers rising by just 2.3%.
But since the company reached its most recent 52-week low of just over $40 in June last year, Wesfarmers shares have appreciated by a significant 22%.
Long-term investors have done especially well out of Wesfarmers shares. Over the past five years, the Wesfarmers share price has risen by more than 65%. And since Wesfarmers' spin-off of Coles Group Ltd (ASX: COL) in November 2018, the company is up by around 55%:
Back in 2018, Wesfarmers announced that Coles would be flying the nest and listing on the ASX 200 in its own right. At the time, Wesfarmers investors received one share of Coles for every share of Wesfarmers share they owned.
This has proven to be a lucrative move for investors. Not only have Wesfarmers shares shot up in value since Coles left the building, but the Coles share price has also rocketed by more than 40% since the spin-off too:
That means investors who held on to both their Coles and Wesfarmers shares since then have done exceptionally well.
Not only have they enjoyed bumper capital gains on both companies, but Wesfarmers and Coles have also both upped their dividends substantially since the divorce.
At the time of the Coles spin-off, Wesfarmers actually retained around 15% of the company, listing the other 85% on the ASX. But over the last few years, Wesfarmers has pared back this stake.
Today, the company only retains a fraction of this original 15%, holding a stake that is worth roughly 2.8% of the entire market capitalisation of Coles.
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Is Wesfarmers about to firesale its last Coles shares?
So could Wesfarmers offload this remaining stake in Coles and give its balance sheet a cash injection? Some investors might want the company to go down this path. Wesfarmers could use the funds for a new acquisition, or else bankroll a special dividend or share buyback program, after all.
Well, it's certainly a possibility. But one that won't be happening anytime soon, if new reporting is to be believed.
According to a report in the Australian Financial Review (AFR) this week, investment bankers regard the sale of this last remaining Coles stake as a done deal. It's just a matter of "when, not if, [the] former parent Wesfarmers will exit the supermarkets giant" completely, they say.
According to the report:
A couple of brokers were sniffing around the stake on Tuesday night, post Coles' interim result, to no avail. They reckon Wesfarmers doesn't need the cash, and is happy to sit and collect its Coles dividends until it finds a use of sale proceeds.
So it doesn't look like Wesfarmers is ready to part with its Coles shares just yet. But watch this space because there are apparently quite a few experts who think it's a done deal. Just not yet.
